Stocks: So far from their highs

Three years ago the markets peaked. Have we learned anything from the past?

You can learn a lot from anniversaries. Take the little-noticed one that arrives in a few days, marking three years since the U.S. stock market’s all-time high. You didn’t realize the market peaked on Oct. 9, 2007? That’s understandable, given all the stuff we’ve had to deal with since then, most of it bad.

Despite a 75% rise in market value since March 2009, U.S. stocks are still down $4.7 trillion from their peak, according to Wilshire Associates. They have to rise by about a third just to get back to where they were three years ago.

Why am I inflicting this history on you? To show that past performance is no guarantee of future performance. Yes, it’s a yawn-inducing cliché. But it’s a lesson you’d better pay attention to. And you’d better get used to the kind of returns investors got before the great bull market of the 1980s and ’90s.

Even though stocks have averaged close to double-digit returns over 85 years, the returns are very uneven. They can be very high, as they were during the two final decades of the 20th century, but turn nastily negative for years on end. Like, say, for the past three years — or the past ten.